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How Effective Tenant Screening Can Lead to Higher Profitability

detective-311684_1280-PDHave you ever wondered how how effective tenant screening can lead to higher profitability?  This is my first post as an author at BiggerPockets.com and will explain effective tenant screening.

I have 24 renters, in two duplexes and five 4-plexes.  I also screen for a large (120 unit) apartment complex, and approve or reject tenants.  I make the call as to when a tenant is no longer an asset to our HOA community, and force other landlords to get rid of their tenants.

Through these experiences, I have seen many tenants’ backgrounds, and see how a background report can predict future tenant behaviors.

The following post contains a few random thoughts; I will focus in more detail on tenant screening topics in future articles.  Be sure to follow my articles to get solid, no nonsense information on getting and keeping great tenants.

Continue reading “How Effective Tenant Screening Can Lead to Higher Profitability”

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How to Use Credit Checks For Screening Renters

credit-40671_1280-PDThis post will tell you how to use credit checks for screening renters.

Why do we care about Credit Records and Credit Score? A credit is score is an indicator of the probability of a default, nothing more. It will show if the person has been responsible with their finances. If a person is responsible with their finances, odds are, they are also responsible with the rest of their lives. A credit score of 700 or better, indicates a solid person. A credit score below 600, indicates a person with some issues, maybe permanent, maybe temporary. Continue reading “How to Use Credit Checks For Screening Renters”

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How I turned a Class ‘D’ Apartment Classification complex into a Class ‘B’ complex.

PistolWhen I purchased my first 4-plex, it was in a first ring suburb, in a nice area of town. It was built in 1985. You could throw a rock outside the complex, and hit $300K homes on all sides. By anyone’s definition, this should be a great place.  Unfortunately, the apartment classification was less than to be desired. Continue reading “How I turned a Class ‘D’ Apartment Classification complex into a Class ‘B’ complex.”

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Renter Horror Story – Mike The Murderer

crime-268902_1280-PDAll landlords have a renter horror story, I am no different.  As a landlord, I meet many interesting people.  As a Section 8 landlord in my early days, the people were MUCH more interesting.  Now I meet people who have jobs, might have a kid or two (with the same last name), and strive for success in a more standard method.  Most have never been arrested, let alone actually ever been in jail.   Quite a boring life… Continue reading “Renter Horror Story – Mike The Murderer”

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Rent Collection: It’s April 2; do you know where your rents are?

packs-163497_1280-PDI have to collect rent from 25 tenants every month.  Most drop the check in the rent box in the building.  In my duplexes, they tape it to the door.  I have one that pays cash, and I stop by to give a receipt.  Some do Bill Pay, and I get a check in the mail.  One mails a check directly, with a stamp.  One pays with PayPal.  Some tenants are roommates, and they each pay with a check.  Continue reading “Rent Collection: It’s April 2; do you know where your rents are?”

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Risk of Tenants with Low Credit Score Explained

I wanted to expand on the credit score criteria in any Tenant Screening Requirements just a bit.

It is a fact that lower credit score individuals are a high risk to insurance companies, and for collecting payments. It is a fact that lower credit score individuals engage in riskier behaviors.

Here is why tenants with a low (or 0) are high risk.

Continue reading “Risk of Tenants with Low Credit Score Explained”

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Lowering the Rent vs. Lowering the Deposit to Attract Quality Tenants

control-571145_1280-PDSometimes, we think we have to attract quality tenants in unconventional ways.  Many people have no money.  After showing your unit many times, you do not think anyone has any money.  Some people have lower income levels.  Some people lack the ability to save, and a landlord wants to “get them in”, so they lower the tenant’s entry hurdle or security deposit.  This is a mistake that will almost always come back to haunt you.  You have a hard time renting your unit, and you finally have a tenant willing to move in.  The only issue is, they do not have enough money to move in.  They probably do not have a high credit score either. Continue reading “Lowering the Rent vs. Lowering the Deposit to Attract Quality Tenants”

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Low Rents Attract Trash

garbage-402295_1280-PDLow rents.  The fact of the matter is, the lower your rent is, the more affordable it is to sub-par renters, or trash.  You will attract them in droves at a low price.  But the flip side to that is you also attract more good renters.  Good renters are always looking for a bargain; good renters that know their financial limits, good renters do not want to live paycheck to paycheck just paying rent.  Good renters know what they want, and will not pay a penny more.  Good renters may even want to negotiate a bit, just to make sure they are getting the best price. Continue reading “Low Rents Attract Trash”